An organization of public school teachers was recently allowed to operate again as a mutual benefit association after it bounced back from financial distress, according to the Department of Finance (DOF).
On March 13, Insurance Commissioner Emmanuel F. Dooc issued a certificate of authority to the Philippine Public School Teachers Association (PPSTA), which for nine years had suffered from financial difficulties and eventually placed under conservatorship, the DOF said in a statement.
“The successful rehabilitation of PPSTA should be heralded as a landmark achievement for the Insurance Commission, as it is the first company among those under the supervision and regulation by the Insurance Commission to be successfully rehabilitated after experiencing financial distress,” the DOF said.
While PPSTA has been removed from conservatorship, the Insurance Commission will still have “effective control” over the mutual benefit association until a “competent and trustworthy” board and management are put in place.
PPSTA has been issued a license because of its “strong financial performance, which is indicative that [it] will soon be able to manage the business on its own,” Dooc said
In 2005, the commission placed PPSTA under conservatorship to address its reserve deficiency and preserve its assets. That year, the association’s liabilities exceeded its assets by P1.8 billion.
Now, PPSTA’s equity stands at P128.31 million following a reversal that started in the middle of last year.
PPSTA’s assets also increased by 8.4 percent to P4.4 billion in 2014 from P4 billion in 2013.
“What we did to PPSTA can be replicated to other companies for their eventual rehabilitation, and for them to be able to continue their business,” Dooc said, referring to the commission’s successful rehabilitation of the association.
Dooc attributed the reversal of PPSTA’s financial position to the Insurance Commission’s close supervision and monitoring, implementation of programs and policies to build up reserves while slashing administrative expenses, as well as the filing of court cases against the association’s erring officials.
PPSTA’s membership includes not only teachers but also school administrators, supervisors, as well as non-teaching support personnel all over the country.
The association provides financial security services via life insurance, loan and retirement programs.